A harbinger of things to come in these parts…or a cautionary tale?

They couldn’t do it in the courts. They couldn’t do it in the legislature. But $40 million and ten years later, they’ve done it with a ballot initiative.

The Costco-bankrolled Initiative 1183 privatizing alcohol sales in Washington State “sailed through” this morning with nearly 60 percent of votes, according to the Seattle Post-Intelligencer. It was the big box club store’s second attempt to privatize, and this time around they spent some $22 million on ads.

The measure will allow stores larger than 10,000 square feet to sell liquor. State officials expects the number of liquor stores to increase exponentially, “from 328 to more than 1,400.” New rules are effective in June.

“We are very grateful to all of our coalition partners across the state,” Costco’s chief legal officer reportedly told the Associated Press. Washington’s state-run system had been in place since 1933.

This kind of misses the point, in a way that surprises me, coming from Beer Business Daily. Was there more of the story that you didn’t post? Because the liquor privatization was just the wrapper on this one. The real bombs were inside: circumvention of the three-tier system by direct purchase from producers and importers, and an end to uniform wholesaler pricing (allowing volume discounts), which are what Costco REALLY wanted. The Wine & Spirits Wholesalers Association clearly did NOT want that…which is why they spent over $12 million trying to stop 1183. They were both trying to buy the election; the WSWA just got outbid.

Someone at the NBWA was saying that this will mean the end of the three tier system. Not really; just in Washington, for now. Three-tier is not a national system, it’s state by state, and every state will have to dismantle it — or choose not to — on its own.

Anyway, will this happen here, some group buying privatization? Not likely. We don’t have a large company that wants to bankroll privatization in PA, and we’re not a ballot initiative state; privatization will have to go through the Legislature, where it’s died three times in 30 years. This keeps the momentum up, but it’s no gamechanger.

That’s the full item, but Harry has done several reports on the Washington battle leading up to this. Here’s one from mid-October….

We thought the privatization campaign in Washington was pretty much dead but it is safe to say that we were wrong. As of this week, Costco has donated over $22.5 million in cash and in-kind contributions to the campaign backing ballot initiative I-1183 in Washington State, which if passed by the voters would privatize their alcohol business, increasing outlets and allowing spirits to be purchased directly from distillers. While it doesn’t include beer, it’s still concerning. At $22 million, they have a pretty good chance of getting it done unless wine and spirits distributors and others step it up. Clearly, Costco is serious about this.

Costco certainly wasn’t joking when they said that they would match their competitors dollar for dollar and then some. The Yes on 1183 campaign in total has almost $23 million backing it. As for their opponents, Protect Our Communities, they have so far raised over $11.6 million, which is nothing to scoff at either. Most of that money has come from the Wine & Spirits Wholesalers of America, but the National Beer Wholesalers Association, Washington Beer and Wine Wholesalers, the Beer Institute, California Beer and Beverage Distributors, and a number of other beer distributors from the likes of Colorado and New York have also contributed. Stay tuned…..

Yeah, see…this is where saying Costco ‘bought’ this election falls short. When WSWA points a righteously indignant finger and says “Costco bought your votes!!”, what they really mean…is that they tried to buy them, and were outbid.